§ 4A-405. PAYMENT BY BENEFICIARY's BANK TO BENEFICIARY.

(a) If the beneficiary's
bank credits an account of the beneficiary of
a payment order, payment of the bank's obligation
under Section 4A-404(a) occurs when and to the extent
(i) the beneficiary is notified of the right to withdraw the credit, (ii) the
bank lawfully applies the credit to a debt of the beneficiary, or (iii) funds
with respect to the order are otherwise made available to the beneficiary by
the bank.

(c) Except as stated in subsections
(d) and (e), if the beneficiary's bank pays
the beneficiary of a payment
order under a condition to payment or agreement of the beneficiary giving
the bank the right to recover payment from the beneficiary
if the bank does not receive payment of the order, the condition to payment
or agreement is not enforceable.

(d) A funds-transfer
system rule may provide that payments made to beneficiaries of funds
transfers made through the system are provisional until receipt of payment
by the beneficiary's bank of the payment
order it accepted. A beneficiary's bank that makes a payment that
is provisional under the rule is entitled to refund from the beneficiary if
(i) the rule requires that both the beneficiary and the originator be
given notice of the provisional nature of the payment before the funds transfer
is initiated, (ii) the beneficiary, the beneficiary's bank and the originator's
bank agreed to be bound by the rule, and (iii) the beneficiary's bank did
not receive payment of the payment order that it accepted. If the beneficiary
is obliged to refund payment to the beneficiary's bank, acceptance of the payment
order by the beneficiary's bank is nullified and no payment by the originator
of the funds transfer to the beneficiary occurs under Section 4A-406.

(e) This subsection applies
to a funds transfer that includes a payment
order transmitted over a funds-transfer
system that (i) nets obligations multilaterally among participants, and
(ii) has in effect a loss-sharing agreement among participants for the purpose
of providing funds necessary to complete settlement of the obligations of one
or more participants that do not meet their settlement obligations. If
the beneficiary's bank in the funds transfer
accepts a payment order and the system fails to complete settlement pursuant
to its rules with respect to any payment order in the funds transfer, (i) the
acceptance by the beneficiary's bank is nullified and no person has any right
or obligation based on the acceptance, (ii) the beneficiary's bank is entitled
to recover payment from the beneficiary, (iii) no
payment by the originator to the beneficiary occurs
under Section 4A-406, and (iv) subject to Section 4A-402(e),
each sender in the funds transfer is excused from its
obligation to pay its payment order under Section 4A-402(c) because
the funds transfer has not been completed.